The demand for buying Ethereum from ETFs and corporate treasuries far exceeds new supply, driving ETH prices up significantly over the past month.
The significant gap between demand and supply has pushed Ethereum up over 65% in one month, with a total increase of over 160% since April. Experts expect the buying trend from ETFs and businesses to continue next year.
MAIN CONTENT
ETFs and corporate treasuries have purchased more than 2.83 million ETH since mid-May.
The price of Ethereum has risen over 65% in the last month due to demand exceeding supply.
The forecast for ETH demand from ETFs and businesses is expected to reach nearly 533,000 ETH in the next year.
Why has the price of Ethereum risen sharply recently?
Accurately explained by Matt Hougan, Chief Investment Officer at Bitwise, the price increase is due to an imbalance between supply and demand, not due to market psychological fluctuations.
The purchasing of large amounts of ETH by ETFs and corporate treasuries has created superior demand pressure compared to the amount of newly issued ETH, which is the main reason for the significant price increases in recent months.
Matt Hougan, Chief Investment Officer of Bitwise, July 2024
The increase in demand from investment funds and large enterprises has made the supply in the market scarce. Meanwhile, the new supply of ETH from mid-May is only about 88,000 per month, which is too little to compensate for the high demand. This has helped Ethereum record a price increase of over 65% in the past month and more than 160% since early April.
In fact, on-chain reports show that buying activity from financial institutions is becoming increasingly strong, demonstrating confidence in ETH as an important strategic asset in long-term investment portfolios.
How do ETFs and corporate treasuries affect the Ethereum market?
ETFs and corporate treasuries play a crucial role in purchasing large amounts of Ethereum, helping to create a new balance between demand and supply in this Token market.
From mid-May to now, this group has accumulated about 2.83 million ETH, 32 times the new supply set at 88,000 ETH/month during the same period. This excess purchasing has pushed ETH prices to unusually high levels, creating upward trends in price and liquidity.
Matt Hougan predicts that demand for ETH from these groups will continue to expand over the next 12 months with an estimated additional purchase of about 533,000 ETH, equivalent to nearly 20 billion USD, while the amount of newly issued ETH only fluctuates around 800,000 units. This continues to increase the pressure of supply shortage, reinforcing the trend of sustainable price increases.
What will the trend of Ethereum supply and demand be like in the next year?
The cryptocurrency industry is experiencing a significant shift as real demand from large funds may far exceed new supply, maintaining a stable upward trend in ETH prices.
From a professional perspective, the fact that the amount of ETH supplied is only a small fraction compared to the amount purchased from ETFs and corporate treasuries is expected to lead to prolonged low supply pressure. This could encourage both individual and institutional investors to continue holding ETH, providing solidity to the cryptocurrency market.
These changes are clearly reflected in transaction reports and on-chain data demonstrating the growing interest in Ethereum as the global financial landscape seeks safe and high-yield assets.
Frequently Asked Questions
What are ETFs and corporate treasuries in the Ethereum market?
ETFs are listed investment funds that help diversify portfolios, while corporate treasuries are used to manage company assets; both typically buy Ethereum to diversify investments and store long-term value.
Why does demand for Ethereum exceeding supply cause price increases?
When purchasing demand greatly exceeds the amount of tokens issued, the market lacks tokens to sell, driving prices up due to fundamental supply-demand effects.
Is the forecast for future Ethereum demand valid?
Expert Matt Hougan, CEO of Bitwise, evaluates forecasts based on trends and real transaction data, which are verified and highly reliable.
What impact does the rising price of Ethereum have on individual investors?
Strong price increases create opportunities for profit but also increase volatility risk, requiring risk management and reasonable strategies for personal investment.
How will this supply-demand situation affect the cryptocurrency market?
The new balance between supply and demand helps develop a sustainable market, reinforcing Ethereum's position and enhancing investor confidence in the cryptocurrency ecosystem.
Source: https://tintucbitcoin.com/ethereum-bung-no-nho-nhu-cau-co-cau/
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